"27th  CONGRESS,  [SENATE.] 

3d  Session. 


DOCUiVIEWTS 

RELATING  TO 

Illinois  and  Michigan  Canal. 


JANUARY  31,  1843. 

Referred  to  the  Committee  on  Roads  and  Canals,  and  motion  to  print,  referred  to  the  Com- 
mittee on  Printing. 

FEBRUARY  1,  1843. 
Ordered  to  be  printed. 


REPORT  OF  THE  CANAL  COMMISSIONERS. 

CANAL  OFFICE,  LOCKPORT, 

December  15,  1842. 

SIR  :  Tn  obedience  to  law,  the  board  of  commissioners  of  the  Illinois  and 
Michicaa  canal  beg  leave  respectfully  to  submit  their 

SEVENTH    ANNUAL   REPORT: 

In  entering  upon  this  duty,  we  piomise  to  be  as  brief  as  the  nature  of  the 
subject  will  admit.  The  voluminous  character  of  the  reports  of  the  trea?- 
urer,  secretary,  and  engineers,  and  the  late  period  at  which  these  reports 
were  received,  and  a  desire  to  place  them  before  the  Legislature  at  as  early 
a  day  of  the  session  as  possible,  actuate  us  to  pursue  this  course. 

To  arrive  at  a  proper  knowledge  of  the  operations  of  the  new  board,  and 
a  just  view  of  their  proceedings,  reference  must  be  had  to  the  condition  of 
the  work  at  the  time  they  took  charge  of  it  in  March,  A.  D.  1841.  There 
was  then  in  circulation  $409,448  70  of  six  per  cent,  scrip  issued  on  the  1st 
of  March,  1840,  and  a  large  balance  due  to  contractors  upon  work  previously 
done,  the  exact  amount  of  which  we  have  no  means  at  present  of  ascertain- 
ing. The  secretary  was  called  upon  some  time  ago  to  prepare  a  statement 
exhibiting  this  fact,  but  has  failed  to  do  so,  and  it  is  now  impossible  to  get  at 
the  precise  sum.  Mr.  Gooding,  the  chief  engineer,  has,  however,  made  an 
approximate  estimate,  based  upon  the  best  data  he  can  obtain,  and  supposes 
it  will  not  vary  much  from  $234,259,  besides  the  retained  per  centage.  To 
meet  these  demands  there  was  nothing  in  the  treasury  except  a  few  thou- 
sand dollars  of  Slate  bank  paper  belonging  to  the  contingent  fund,  which  was 
soon  absorbed  in  the  payment  of  salaries  and  other  incidental  expenses.  The 
scrip  had  been  issued  under  the  expectation  it  would  be  redeemed  at  an  early 
period,  and  contractors  who  had  balances  due  them  were  solicitous  for  pay- 
ment. The  Legislature  at  its  then  recent  session  had  adjourned  without 
making  any  provision  to  meet  these  demands,  or  for  the  further  prosecution 
of  the  work,  and,  as  might  be  expected,  general  distrust  and  embarrassment 
ensued  throughout  the  entire  line  of  the  canal.  The  secretary  and  engineer*- 
Thomas  Allen,  print. 


[115]  2 

in  their  accompanying  reports  labor  to  produce  the  impression  that  a  general 
suspension  of  the  work  did  not  take  place  until  after  the  organization  of  the 
new  board  of  commissioners.  This  is  not  the  fact.  From  the  causes  already 
enumerated  the  greater  portion  of  the  contractors  ceased  efficient  operations 
previous  to  this  time,  and,  in  addition  to  the  heavy  debt  hanging  over  the 
•work,  we  were  compelled  to  struggle  with  expiring  hopes  arid  almost  uni- 
versal dismay. 

Under  these  circumstances,  it  was  difficult  to  determine  upon  the  correct 
policy  to  be  pursued.  On  the  one  hand,  we  contemplated  the  overwhelming 
debt  pressing  upon  the  Stale,  and  which  had  fallen  like  an  avalanche  upon 
her,  and  the  depreciation  of  her  securities  in  the  market,  as  well  as  the  heavy 
and  immediate  demands  upon  the  canal,  we  were  persuaded  that  probably  it 
was  our  duty  to  wind  up  its  affairs,  and  leave  it  entirely  for  future  legislative 
action.  On  the  contrary,  our  own  election,  and  a  desire  to  sustain  so  great 
a  work  as  far  as  it  could  be  done  consistent  with  the  interest  of  the  State, 
and  the  fact  that  there  was  yet  unappropriated  in  the  hands  of  the  Governor 
about  $1,700,000  of  bonds  of  the  $4,000,000  authorized  to  be  sold  by  an 
act  of  the  Legislature  of  1838,  '39,  together  with  the  knowledge  that  a  large 
number  of  laborers  were  out  of  employment,  and  could  obtain  it  nowhere 
else  on  favorable  terms,  as  operations  upon  the  public  works  in  the  west  and 
southwest  had  generally  ceased,  forbid  that  we  should  make  no  effort  to 
carry  forward  an  enterprise  in  which  are  centred  the  hopes  of  a  State,  and 
to  which  she  continued  to  look  with  intense  and  increasing  solicitude.  What, 
then,  was  to  be  done?  Would  it  be  prudent,  under  the  circumstances,  to 
endeavor  to  revive  and  push  forward  all  the  work  or  a  portion  of  it,  and  if  a 
portion  only,  what  portion  ?  In  determining  these  questions,  reference  was 
made  to  the  best  information  which  could  be  obtained.  Prudence,  indeed, 
would  dictate  that  duty  required  we  should  concentrate  as  much  force  as 
possible  upon  the  greatest  extent  of  line  that  could  be  brought  into  use  for 
the  least  money.  Actuated  by  this  view,  and  deeply  sensible  of  the  magni- 
tude and  importance  of  the  responsibility  to  be  assumed  by  a  change  of  pol- 
icy, we  determined  on  directing  our  attention  to  that  part  of  the  canal  ex- 
tending from  Juliet  to  its  western  termination,  and  accomplishing  as  much 
upon  it  as  could  be  done  compatible  with  the  public  interest.  Whether  we 
were  correct  in  adopting  this  course  let  facts  and  figures  determine.  The 
whole  cost  of  construction  was  estimated  by  the  chief  engineer  in  his  report 
of  December  10, 1840,  at  $8,480,478  68.  The  summit  division,  commonly 
designated  the  "  deep  cut,"  extending  from  section  1  to  section  68,  inclusive, 
a  distance  of  only  29.51  miles,  was  estimated  to  cost  $4,853,724,  upon  which 
$2,077,329  82  of  work  was  estimated  up  to  February  28,  1841.  showing  it 
would  require  $2,776,394  18  to  complete  that  part  of  the  line,  no  portion  of 
which  could  be  used  until  it  was  all  finished,  as  it  was  to  be  supplied  with 
water  from  Lake  Michigan.  The  middle  division,  extending  from  section. 
69  to  section  140,  both  inclusive,  was  estimated  in  the  same  report  to  cost 
$1,512,114  06,  upon  which  work  was  done  to  the  amount  of  $993,395  44 
up  to  the  same  period,  showing  that  it  would  require  $518,718  62  to  com- 
plete it,  a  large  amount  of  which  was  required  to  be  expended  between  sec- 
tion 69  and  Juliet.  From  this  point  to  Dresden,  a  distance  of  17£  miles, 
the  work  was  principally  completed,  and  such  as  was  not  was  under  contract. 

The  work  from  Dresden  to  the  western  termination  of  this  division,  or 
from  section  109  to  140,  inclusive,  had  never  been  offered  at  a  public  letting^ 
and  consequently  nothing  was  done  upon  it. 


3  [  115  ] 

The  western  division,  extending  from  section  141,  inclusive,  to  the  termi- 
nation of  the  canal,  was  estimated  to  cost  $1,788,468  36,  upon  which  work 
was  done  to  the  amount  of  $1,108,263  29,  showing  there  remained  to  be 
done  work  to  the  amount  of  $680.205  07.  The  principal  items  comprising 
this  sum  are  the  aqueduct  across  Fox  river,  at  the  town  of  Ottowa,  and  the 
steamboat  basin  at  La  Salle.  A  large  part  of  the  work  upon  this  division 
was  not  under  contract.  That  part  of  it  extending  from  section  141  to  154, 
both  inclusive,  had  never  been  let,  but  the  remainder  had,  and  n  portion  of 
it  abandoned.  That  portion  it  was  determined  to  put  under  contract  as  soonv 
as  possible,  as  it  was  believed  responsible  persons  could  be  found  who  would 
take  it  on  advantageous  terms.  Accordingly,  it  was  let  on  the  29th  of  May, 
1841,  on  the  express  condition  it  was  all  to  be  completed  within  one  year, 
except  the  Little  Vermilion  aqueduct,  for  the  completion  of  which  the  time 
was  extended  a  few  months  longer,  in  consideration  of  its  being  a  heavy  job. 
The  report  of  the  resident  engineer  will  show  the  amount  of  work  done  upon 
the  awards  made  at  that  time. 

It  is  proper,  however,  to  state  that  some  of  the  contractors  failed  to  make  a 
«ornmencement  within  the  time  allowed,  and  the  work  was  again  relet. 

From  the  foregoing  estimates  it  will  be  seen  that  while  it  would  require 
$2,776,394  18  to  complete  the  summit  division  alone,  $1,198,923  69,  to 
say  nothing  in  relation  to  the  reduction  of  price,  would  be  sufficient  to  finish 
all  the  balance  of  the  work,  and  bring  twice  the  extent  of  line  into  use. 
About  $600,000  of  this  amount  was  already  under  contract,  including  the  small 
amount  of  work  let  on  the  29th  of  May,  1841,  and  the  greater  part  of  it  was 
prosecuted  during  the  summer  with  considerable  vigor.  Laborers  could  be 
obtained  in  abundance,  in  consequence  of  the  almost  total  suspension  of  op- 
erations on  the  summit  division;  and  from  the  best  information  in  ihe  pos- 
session of  the  commissioners,  they  were  induced  to  believe  contractors  could 
be  found  able  and  willing  to  undertake,  and  if  not  finish,  at  least  advance  to 
a  considerable  extent,  before  the  meeting  of  the  next  Legislature,  that  part 
of  the  line  below  Juliet  upon  which  nothing  had  been  done.  Impressed 
with  this  view,  and  taking  into  consideration  the  comparatively  small  sum  it 
would  require  to  complete  it,  the  length  of  canal  it  would  bring  into  use,  the 
character  of  the  work  to  be  done,  requiring  but  a  small  outlay  of  money,  be« 
ing  principally  light  excavation,  the  fact  that  a  portion  of  it  was  already  un- 
der contract,  and  was  progressing  more  rapidly  than  could  reasonably  have 
been  anticipated  under  the  embarrassed  condition  of  the  country;  and  that 
there  was  no  feeder  above  Juliet,  at  which  place  the  Des  Plaines  discharges 
its  waters  into  the  canal,  until  the  lake  was  reached,  induced  the  determina- 
tion to  make  an  effort  to  let  that  part  of  the  line  extending  from  section  109 
lo  154,  both  inclusive,  running  in  the  valley  of  the  Illinois  river,  and  which, 
when  completed,  will  connect  the  portion  extending  from  Juliet  to  Dresden, 
and  from  Marseilles  to  La  Salle,  and  give  a  continuous  chain  of  navigation 
for  sixty-three  miles,  about  two  thirds  of  the  whole  length  of  the  canal. 

Accordingly,  early  in  the  summer  a  party  of  engineers  was  sent  to  locate 
the  line  and  revise  the  estimates,  preparatory  to  the  letting  which  took  place 
on  the  20th  of  September. 

In  revising  these  estimates  no  attention  was  paid  lo  former  ones,  as  the 
accompanying  letter  from  the  commissioners  to  Wm.  Gooding,  chief  engi- 
neer, marked  "  A,"  and  his  reply  marked  "B,"  will  clearly  show.  But  this 
fact  will  appear  in  a  still  more  striking  point  of  view,  by  comparing  the  for- 


[115]  4 

mer  wilh  the  subsequent  estimates.  The  first  estimate  was  made  in  1836, 
and  amounted  to  $505,307  98. 

The  aggregate  amount  of  the  estimates  made  in  1841  was  £449,310  05, 
and  the  work  was  awarded  at  $63,134  01  less  than  this  estimate,  which  sub- 
tracted from  it,  and  the  remainder  deducted  from  $505,307  98,  will  show  a 
difference  in  favor  of  the  last  letting  of  $119.131  94,  compared  with  the  es- 
timates of  1836. 

It  will  be  remembered  by  those  conversant,  with  the  history  of  the  canal, 
that  a  bill  was  introduced  inlo  the  House  of  Representatives,  at  the  last  ses- 
sion of  the  General  Assembly,  giving  this  work  to  an  "association  of  con- 
tractors "  at  the  original  estimate,  to  which,  however,  there  was  subsequently, 
and  before  the  passage  of  the  bill  through  the  House,  a  proviso  attached,  re- 
quiring the  commissioners  in  the  first  place  to  offer  it  at  public  letting,  and 
if  no  responsible  person  or  persons  would  take  it  at  less  than  this  estimate, 
and  receive  in  payment  canal  bonds  at  par,  then  said  work  should  be  let  to 
contractors  associated  under  the  provisions  of  the  act.  This  proviso,  drawing 
an  invidious  distinction  between  different  contractors,  compelling  those  not 
associated  under  the  act  to  take  the  work  at  less  than  the  estimate,  and  in 
the  event  of  a  failure  to  do  so,  giving  it  to  the  association  at  the  estimate, 
would  have  been  a  weak  and  ineffectual  barrior  between  incorporated  power 
and  individual  enterprise.  Indeed,  little  or  no  doubt  can  be  enterlained  that 
the  whole  canal  would  soon  have  fallen  into  the  hands  of  the  company  at 
its  original  estimates  under  the  operations  of  this  bill,  if  it  had  passed  into  a 
ILW,  and  thus  the  State  have  been  compelled  to  pay  a  very  large  amount 
more  for  the  work  than  it  can  be  done  for.  Allusion  is  made  to  this  act  not 
for  the  purpose  of  casting  censure  upon  any  individual,  but  to  show  the  loss 
the  State  would  have  sustained  by  disposing  of  the  work  on  the  canal  ac- 
cording to  its  provisions.  It  may  also  be  observed,  that,  having  required 
cash  estimates  of  the  work  to  be  offered  for  contract,  and  a  determination  not 
to  award  it  at  prices  beyond  those1  estimates,  induced  the  commissioners  to 
believe  that  if  nothing  was  gained  by  the  letting,  nothing  certainly  could  be 
lost  to  the~ State.  The  expense  of  the  survey  and  location  of  the  line  would 
necessarily  be  incurred,  if  not  then,  at  some  future  period,  and  the  work  ex- 
ecuted would  be  so  much  done  at  fair  prices.  We  could  not  doubt  but  wis- 
dom and  sound  policy  required  we  should  endeavor  to  bring  some  portion  of 
the  line  into  use  as  soon  as  possible,  and  consequently  that  part  which  would 
give  the  greatest  length  for  the  least  money.  The  course  before  pursued, 
was  to  confine  operations  to  the  heaviest  work,  leaving  the  lighter  portions 
undisturbed,  until  there  would  be  time  just  sufficient  allowed  for  its  comple- 
tion at  the  time  of  the  completion  of  the  heavier  work,  that  the  canal  might 
all  be  put  into  operation  at  the  same  moment.  This  idea,  magnificent  in  its 
conception,  but  fatal  in  its  consequences,  operated  in  the  construction  of  our 
internal  improvement  system,  has  prevailed  in  few  other  States,  and  is  un- 
suited  to  the  present  age  of  common  sense  and  sound  economy. 

The  chief  engineer,  however,  arrives  at  the  conclusion  in  his  report,  that 
if  the  canal  was  completed  from  Juliet  to  its  western  termination  it  could 
not  be  supplied  with  water  during  the  whole  navigable  part  of  the  year, 
and  if  it  could  it  would  be  of  little  use  and  afford  but  a  trifling  revenue. 
Upon  all  these  points  the  commissioners  differ  wilh  him,  except  the  first, 
and  as  to  this,  they  are  willing  to  concede  that  in  very  dry  seasons,  proba- 
bly the  Des  Flaines  and  Dti  Page  rivers  would  not  afford  a  sufficient  vol- 
ume for  navigation  during  the  whole  time ;  but  admit  they  would  do  it  for 


5  [115] 

orriy  half  (his  time,  and  this  it  is  presumed  will  not  be  disputed,  and  within 
this  period  large  quantities  of  wheat  and  produce  of  almost  every  descrip- 
tion would  pass  in  boats  to  Juliet  and  be  carried  by  wagons,  thence 
to  Chicago,  which  would  return  with  lumber,  salt,  castings,  and  merchan- 
dise of  various  kinds,  that  would  be  shipped  at  this  point  for  Peru  on  the 
Illinois  river,  and  thus  not  only  prove  advantageous  to  a  large  portion  of 
the  people  of  the  State,  but  a  considerable  revenue  would  be  derived  from 
the  operation. 

There  was  still  another  consideration  connected  with  this  subject  that, 
aside  from  any  other  reason,  would  have  actuated  us  to  pursue  the  course 
we  did  in  concentrating  all  the  force  possible  upon  the  line  from  Juliet 
down.  By  reference  to  a  former  part  of  this  report,  it  will  be  seen  that  it 
required  on  the  first  of  March,  1841,  according  to  Mr.  Gooding's  report  of 
1840,  and  the  returns  of  estimates  in  the  office,  $2.776,394  18  to  complete 
the  summit  division,  the  original  estimates  for  which  was  $4,853,724 
while  its  length  was  only  29.51  miles.  This  division  is  commonly  known, 
as  the  "  deep  cut,"  in  relation  to  which  there  was  a  very  animated  and  ex- 
citing controversy  in  the  Legislature  of  1836-'37.  The  fact,  that  so  small 
a  portion  of  the  line  upon  which  there  were  no  structures  of  any  conse- 
quence, was  estimated  to  cost  more  than  all  the  balance  of  the  work,  justly 
excited  public  attention,  and  led  to  the  inquiry  whether  it  could  not  be 
constructed  upon  a  raised  level  of  eight  or  ten  feet  and  a  supply  of  waler 
drawn  from  the  neighboring  streams.  The  history  of  the  controversy,  grow- 
ing out  of  this  question,  has  been  so  fully  detailed  by  the  chief  engineer  in 
his  report,  that  the  commissioners  find  few  deficiencies  to  supply. 

Two  reports  were  made,  one  in  favor  of  and  the  other  against  the  "  deep 
cut,"  the  former  by  Mr.  Thomas,  of  the  Senate,  and  the  latter  by  Mr.  Cloud, 
of  the  House.  All  the  information  that  could  be  elicited  upon  the  subject  at 
the  time  was  obtained,  and  the  Legislature  finally  determined  the  work 
should  be  still  prosecuted  on  the  "  deep  cut"  plan,  without,  it  is  believed,  a 
thorough  and  scrutinizing  investigation  into  the  practicability  of  adopting  the 
"  shallow  cut ;"  mainly,  for  the  reason,  that  no  doubt  seemed  to  be  then  en- 
tertained, but  that  the  magnificent  donation  of  land  by  Congress,  would  yield 
an  amount  fully  adequate  to  finish  the  work  upon  the  most  expensive  scale. 

The  various  engineers  who  had  gauged  the  Calumet,  Des  Plaines,  and 
Fox  rivers,  estimated  the  quantity  of  cubic  feet  of  water  they  would  furnish 
per  minute,  differently,  and  it  does  not  appear  that  it  was  seriously  contem- 
plated at  that  period  that  any  other  stream  could  be  introduced  as  a  feeder. 
The  introduction  of  the  Fox,  at  some  eligible  point  above  Lockport,  was 
decided  to  be  impracticable,  and  no  doubt  was  and  still  is.  To  place,  how- 
ever, this  question  beyond  controversy,  it  was  determined  to  employ  the  ser- 
vices of  some  distinguished  engineer  of  another  State,  who  stood  unconnect- 
ed with  the  controversy.  Accordingly,  the  commissioners,  in  pursuance  of 
law,  invited  Judge  Wright,  of  New  York,  to  make  the  requisite  examinations, 
who  complied  with  that  invitation,  and  in  the  early  part  of  October.  1837, 
arrived  at  Chicago,  and  soon  after  entered  upon  the  duty  assigned  him,  and 
the  result  of  his  investigation  communicated  to  the  Legislature  in  December, 
1838,  seems  to  have  left  the  question  in  as  much  doubt  as  it  was  before.  He 
adopted  as  the  basis  of  his  opinion  the  measurements  that  had  been  previ- 
ously made  by  other  engineers,  and  concluded  the  waters  of  the  Calumet, 
as  they  rose  in  the  State  of  Indiana,  notwithstanding  they  swept  through  a 
portion  of  Illinois,  where  it  was  proposed  to  draw  them  out,  and  discharged 


[115]  6 

themselves  into  the  lake  within  its  limits,  were  not  the  legitimate  wafers  of 
the  State.  He  expresses  no  opinion  as' to  the  quantity  of  water  the  Dea 
Plaines  would  furnish,  except  upon  the  data  prepared  by  others,  and  none  at 
all  upon  the  quantity  the  Calumet  would  supply  for  the  canal ;  nor  does  it 
appear  from  any  information  within  our  reach,  that  he  directed  his  at- 
tention to  any  other  streams,  but  arrived  at  the  conclusion,  as  it  was  not  prac- 
ticable to  introduce  the  Fox  river  as  a  feeder  above  Lockport,  and  the  Des 
Plaines,  according  to  the  measurement  of  the  United  States  engineers,  would 
only  furnish  54,800  cubic  feet,  per  hour,  and  the  Calumet  was  not  the  "  legi- 
timate waters  of  the  State,"  that,  therefore,  a  supply  of  water  for  the  canal 
must  necessarily  be  drawn  from  the  lake. 

After  this  report  of  Judge  Wright  was  submitted,  with  lhat  of  the  commis- 
sioners accompanying  it  to  the  Legislature,  the  question  appeared  to  be  put 
entirely  at  rest.  But  the  new  board,  on  entering  upon  the  duties  of  their 
office,  paid  some  attention  to  this  subject,  and,  in  view  of  the  embarrassed 
condition  of  the  State,  the  expensive  character  of  the  work,  the  amonnt  re- 
quired to  complete  it,  and  the  settled  belief  that  a  supply  of  water  could  be 
obtained  upon  a  raised  level,  led  them  to  the  conclusion,  as  they  had  no 
power  to  change  the  plan  of  the  canal,  it  being  fixed  and  determined  by  law, 
that  it  was  the  best  policy  to  do  nothing  upon  this  division  until  the  meeting 
of  the  next  Legislature,  and  in  the  meantime  more  fully  test  the  feasibility 
of  adopting  the  "  shallow  cut;"  and  this  opinion  they  freely  and  frankly 
expressed.  Yet,  as  the  principal  part,  of  it  was  under  contract,  and  in  making 
payments  to  contractors,  they  could  not  refuse  to  place  those  who  had 
balances  due  them,  or  the  few  who  continued  to  operate  for  a  short  time, 
upon  an  equal  footing  with  others.  A  large  amount  of  work,  however,  done 
upon  this  portion  of  the  line,  was  effected  by  an  arrangement  between  some 
of  the  contractors  who  held  portions  of  it,  with  the  Governor,  in  August, 
1841,  with  which  the  commissioners  had  nothing  to  do. 

The  result  of  the  chief  engineer's  investigations  pertaining  to  this  matter, 
will  be  found  embraced  in  his  report.  It  will  be  seen  he  proposes  three 
plans  for  the  completion  of  the  canal  upon  a  raised  level  of  eight  feet, 
neither  of  which,  however,  he  specifically  recommends,  but  his  opinion  can 
be  very  easily  drawn  from  his  report.  The  cost  of  the  first  he  estimates, 
inclusive  of  feeders,  at  $1,777,536  28,  the  second,  $1,873,187  96,  and  the 
third  $1,992,156  03.  To  make  up  these  amounts,  it  is  assumed  that  it  will 
require  $230,000  to  settle  with  the  old  contractors  and  induce  them  to  re- 
linquish their  jobs.  Deduct  this  sum  from  the  amount  required  to  complete 
the  work  on  the  first  plan,  for  it  has  not  properly  anything  to  do  with  the 
construction  account,  and  it  will  show  that  $1,547,536  28  will  be  required 
io  finish  the  entire  canal,  being  $1,228,857  90  less  than  the  amount  re- 
quired to  complete  the  summit  division  alone,  on  the  first  of  March,  1841. 
Four  hundred  and  fifty-nine  thousand  four  hundred  and  fifty-two  dollars, 
forty-eight  cents,  the  amount  now  estimated  to  finish  this  division,  according 
to  the  present  plan,  deducted  from  $2,776,394  18,  will  show  a  difference  in 
its  favor  of  $2,316,941  70,  when  compared  with  the  work  to  be  done  upon 
it  on  the  first  of  March,  1841.  The  same  process  of  reasoning  and  the 
came  general  results  will  hold  good  in  reference  to  the  other  two  plans  ex- 
cept they  are  estimated  to  cost  a  little  more. 

It  should  not  be  forgotten  either  that  in  adopting  either  of  these  plana  the 
water  power  upon  and  the  navigation  of  the  feeders  created  by  their  con- 
ftiuclion,  is  computed  to  be  worth  as  much  as  their  cost. 


In  the  estimate  of  Mr.  Gooding,  it  will  be  observed  he  has  included  the 
cost  of  constructing  a  feeder  from  the  Kankakee,  and  has  expressed  the 
opinion  it  will  be  necessary  to  introduce  the  waters  of  that  river  to  insure  a 
sufficient  supply  in  dry  seasons.  The  data  upon  which  he  arrives  at  this 
conclusion  is  based  upon  the  calculation  that  it  will  require  9,924  cubic  feet 
of  water  to  supply  the  canal  from  section  No.  1  to  Marseilles,  from  which 
point  it  is  to  be  fed  from  Fox  river,  and  that  the  Calurnet,  Des  Plaines  and 
Du  Page  rivers  will  only  supply,  allowing  for  all  losses,  6,300  cubic  feet  per 
minute,  showing  a  deficiency  of  3,624  cubic  feet  per  minute.  N.  D.  El- 
wood,  one  of  the  resident  engineers  upon  the  line,  and  one  who  has  be- 
stowed  a  good  deal  of  attention  upon  this  subject,  has  furnished  the  presi- 
dent of  the  board  with  a  statement  which  lie  thinks  will  stand  the  test  of 
the  most  rigid  scrutiny,  in  which  he  gives  it  as  his  opinion  that  these  three 
last-mentioned  streams,  Calumet,  Des  Plaines,  and  Du  Page,  will  furnish  a 
volume  of  water  in  the  averrige  equal  from  12,000  to  15,000  cubic  feet  per 
minute  in  their  ordinary  stages,  from  30,000  to  40,000  in  their  highest,  and 
9,000  in  their  lowest;  and  he  does  not  hesitate  to  express  the  belief  they 
would  be  sufficient  to  feed  the  summit  division,  and  afford  besides  a  con- 
sidejable  surplus  for  manufacturing  purposes.  Whether  Mr.  Elwood  or  Mr. 
Gooding  is  right,  the  commissioners  will  not  undertake  to  determine  ;  but 
from  the  magnitude  of  the  question  involved,  it  will  require  further  investi- 
gation. It  may,  however,  be  remarked  here,  that  if  the  Calumet,  Des 
Plaines,  and  Du  Page,  should  prove  inadequate  to  supply  the  canal  with  the 
water  after  a  fair  test,  the  Kankakee  could  afterward  be  introduced  at  no 
greater  cost  than  at  first. 

Another  serious,  not  to  say  insuperable  objection  to  the  "  deep  cut  "  is, 
that  experience  has  proven  quicksand  is  encountered  from  ten  to  eighteen 
feet  below  the  surface  of  the  earth  at  different  places,  which  would  be  diffi- 
cult and  expensive,  perhaps  impossible  to  overcome ;  and  from  the  depths  of 
the  banks  they  would  necessarily  give  way,  to  a  greater  or  less  extent,  and 
wash  into  gulleys  by  the  action  of  the  surface  water,  and  form  bars  in  the 
canal  sufficient,  in  many  instances,  to  obstruct  the  navigation,  unless  re- 
moved. 

From  all  these  facts,  at  least  one  important  conclusion  can  be  arrived  at, 
tind  that  is,  that  it  would  be  the  part  of  wisdom  to  abandon  the  "  deep  "  and 
adopt  the  "shallow  cut"  and  the  commissioners  do  not  hesitate  to  recom- 
mend such  a  couse  in  the  strongest  terms.  The  immense  difference  in  the 
cost  of  the  two  plans,  and  the  time  that  would  be  saved  in  finishing  the 
work,  to  say  nothing  about  the  impossibility  of  providing  funds  to  complete 
it  as  originally  undertaken,  should  alone  be  sufficient  to  produce  this  result. 
As  to  whether  it.  would  be  prudent  to  adopt  the  first,  second,  or  third  plan 
detailed  by  Mr.  Gooding  in  his  report,  we  respectfully  suggest  it  would  be 
proper  for  the  legislature  to  leave  the  commissioners  to  exercise  their  best 
discretion  in  the  premises,  after  a  more  thorough  and  searching  investigation 
into  the  matter. 

The  probable  loss  to  the  State  by  adopting  the  "deep  cut"  in  the  first 
instance  upon  the  work  already  done,  Mr.  Gooding  estimates  at  about 
$1,225,000. 

"The  only  obstacle  presented  to  adopting  the  "  shallow  cut,"  is  the  con- 
tracts already  existing  upon  the  summit  division.  All  but  thirteen  sections 
of  this  division  are  considered  in  this  condition,  and  the  chief  engineer  esti- 
mates it  will  require  $230,000  to  settle  with  the  contractors,  inclusive  of  Oa$ 


[  115  ]  8 

per  centage  retained.  This  sum  the  commissioners  believe  to  be  greatly  too 
large,  and  they  have  no  doubt  but  the  difficulty  presented  can  be  easily  re- 
moved for  a  much  less  amount.  The  best  manner,  however,  to  effect  it,  is 
a  matter  of  some  doubt.  The  history  of  the  public  improvements  of  the 
State  furnish  mournful  evidence  of  the  fact  that  when  individuals  claimed 
damages,  they  were  almost  certain  to  obtain  as  much  as  their  consciences 
would  allow  them  to  ask.  Persons  who  had  extravagant  notions  of  the 
value  of  property  were  generally  selected  as  witnesses,  and  the  damages  al- 
lowed were  in  accordance  with  their  opinions.  This  would  probably  be  the 
case  in  the  present  instance,  unless  the  legislature  should  throw  around  the 
settlement  of  these  contracts  safeguards  to  prevent  similar  abuses.  The 
commissioners  by  no  means  desire  to  oppress  the  contractors,  nor  do  they 
hesitate  to  express  the  belief  that  the}7  would  be  entitled  to  compensation  if 
their  contracts  are  taken  from  them  ;  but  they  would  prevent,  if  in  their 
power,  anything  beyond  a  fair  and  just  equivalent. 

Upon  the  remainder  of  the  line  no  obstructions  of  this  kind  will  be  en- 
countered. As  there  exists  no  necessity  of  a  change  of  plan,  the  old  con- 
tractors can  proceed  with  their  jobs.  And  as  to  the  work  let  by  the  new 
board  it  will  all  be  subject  to  the  control  of  the  legislature,  or  our  succes- 
sors in  office  after  the  4th  of  March  next.  It  was  thought  necessary  on 
letting  it,  to  require  its  completion  within  a  specified  time,  and  to  provide 
that  no  damage  should  be  paid  if  the  work  should  cease  for  any  reason. 
That  time  has  expired,  but  with  a  view  of  having  as  much  done  as  possi- 
ble, the  commissioners  agreed  to  extend  it  to  the  period  designated. 

Although  the  word  "contract"  is  used  in  relation  to  the  work  let  by 
them,  for  the  sake  of  convenience,  there  was  in  fact  no  contracts  executed, 
with  very  few  exceptions,  and  these  have  since  been  declared  abandoned, 
or  subject  to  be  at  any  moment.  If  it  should  hereafter  be  thought  advisable 
to  offer  the  work  again  for  letting,  under  the  supposition  it  can  be  finished 
for  less  money,  there  are  no  difficulties  in  the  way  to  prevent  such  a  pro- 
ceeding. We  determined  that  we  would  encumber  the  canal  with  no 
contracts  or  propositions  to  extend  beyond  the  terms  of  our  office,  but 
leave  that  portion  of  it,  subject  to  our  control,  as  free  as  when  we  took 
charge  of  it. 

Reference  is  made  to  the  report  of  the  resident  engineer,  for  the  amount 
of  work  done  since  March,  1840.  Although  not  as  much  has  been  ac- 
complished as  was  at  one  time  expected,  owing  to  the  consfantly  decli- 
ning value  of  State  securities,  and  other  almost  insurmountable  obstacles 
which  met  us  at  every  step  from  the  commencement  of  our  official  duties, 
still  something  has  been  effected  under  as  gloomy  and  discouraging  cir- 
cumstances as  were  ever  encountered  in  the  construction  of  a  public  work. 

At  pages  eleven  and  twelve  of  the  chief  engineer's  report,  he  alludes 
to  an  investigation  he  was  directed  to  make  as  to  what  would  be  the  dif- 
ference in  the  cost  of  completing  the  summit  division  by  cutting  it  two  feet 
less  in  depth  than  was  required  by  the  original  plan,  and  making  it  twenty 
feet  in  width?  and  the  result  of  his  calculation  is,  that  it  would  reduce 
the  expense  $818,691  31,  leaving  it  twenty- four  feet  in  width.  It  will 
be  observed,  he  expresses  the  opinion  it  would  not  be  practicable  to  make 
the  suggested  change  ;  and,  as  little  doubt  now  exists  as  to  the  adoption 
of  the  "shallow  cut,"  it  is  unnecessary  to  discuss  the  question.  It  might, 
however,  have  become  one  of  some  importance  under  other  circumstances. 
The  lake  was  to  furnish  six  feet  of  water,  according  to  the  original  design, 


9  [  115  } 

and  a  canal  supplied  with  four  feet  of  water,  with  less  breadth,  would  cer- 
tainly be  preferable  to  no  canal.  And  if  the  lake  had  failed  to  supply  this 
quantity,  and  it  should  become  necessary  to  let  the  Calumet  in,  it  could 
have  been  done  at  a  comparatively  trifling  expense,  and  an  abundance  of 
water  obtained. 

As  has  already  been  stated,  a  heavy  debt,  pressing  lor  immediate  pay- 
ment, was  hang-ing  over  the  canal  at  the  time  we  entered  upon  the  dis- 
charge of  our  duty.  Many  of  the  contractors  who  had  balances  due  them 
in  the  office,  were  purchasers  of  land  and  lots,  and  as  there  were  no  funds 
to  pay  them,  they  desired  that  these  balances  should  be  received  in  payment 
of  their  obligations,  while  others,  who  held  the  scrip,  were  daily  making 
application  that  it  should  be  also  received  in  the  same  way.  The  question 
presented  was  one  of  a  peculiar  and  delicate  nature.  The  Slate  owed  an 
individual  upon  one  account,  and  the  individual  the  State  upon  another. 
Yet  there  was  no  law  expressly  providing  for  an  offset.  Under  these  cir- 
cumstances, fully  considering  the  nature  of  the  responsibility,  the  commis- 
sioners unanimously  determined  they  would  be  justifiable  in  making  it. 
Accordingly,  they  established  a  rule,  that  they  would  receive,  in  payment 
for  all  dues  to  the  canal  fund,  scrip  and  orders  drawn  upon  them,  quarterly, 
all  sums  over  $50,  from  those  who  had  claims  upon  that  fund,  not  only  as 
an  act  of  jusiice  to  the  individuals,  but  as  a  matter  of  policy,  whether  the 
obligation  to  be  discharged,  was  due  or  not.  To  effect  this,  it  was  deemed 
advisable  to  give  an  acceptance  of  the  order,  file  the  same  in  the  office,  and 
receive  the  acceptance  in  payment. 

The  same  reason  which  led  to  the  adoption  of  this  course,  operated  to 
induce  us  to  give  the  same  kind  of  acceptances  upon  orders  drawn  for  work 
afterward  done,  both  upon  the  old  and  new  contracts.  They  were,  how- 
ever, found  to  be  inconvenient  in  the  transaction  of  business,  and  what  is 
denominated  "canal  indebtedness,"  was  issued  for  the  joint  purpose  of  re- 
deeming these  acceptances,  and  paying  future  estimates.  This  evidence  of 
indebtedness  was  printed  on  the  back  of  engraved  checks,  procured  by 
General  Thornton  for  another  purpose,  and  ran  thus :  £!  Due  from  the  com- 
missioners of  the  Illinois  and  Michigan  canal  to  A.  B.,  for  work  done  upon, 
said  canal, dollars,  which  will  be  paid  when  funds  are  pro- 
vided for  that  purpose."  It  will  be  seen  this  indebtedness  draws  no  inter-" 
est,  and  that  no  specific  time  is  fixed  for  its  payment.  With  a  view,  how- 
ever, to  enable  contractors  to  progress  with  their  work,  and  create  a  demand 
for  it,  in  addition  to  (hat  which  would  grow  out  of  the  debts  already  due  to 
the  canal  fund,  it  was  agreed  to  hold  sales  of  lands  and  lots,  under  existing 
laws  authorizing  them,  and  receive  it  in  payment.  Accordingly,  two  sales 
were  held — the  first  in  1841,  and  the  other  in  1842.  The  aggregate  of 
these  sales  is  shown  by  the  treasurer's  report  to  be  $286,758  04. 

The  Secretary's  report  shows  that  $227,770  00  of  acceptances  were  issued, 
$168,197  57  of  which  have  since  been  redeemed,  and  (hat  $399,910  00  of 
canal  indebtedness  was  also  issued,  $106,731  87  of  which  has  also  been 
taken  up,  leaving  $352,750  56  of  both  species  of  indebtedness  still  out- 
standing. 

It  will  also  be  seen  from  the  treasurer's  report,  that  the  amount  of  bills 
receivable  now  on  hand  is  $520,282  50.  This  includes  the  unpaid  balances 
due  upon  miscellaneous  accounts  for  trespasses  on  canal  lands,  timber,  &c., 
the  sales  of  1841,  '42,  and  all  previous  sales,  inclusive  of  the  sales  of  canal 
lots  in  Chicago  and  Ottowa  in  1836.  How  much  remains  unpaid  upon 


[  115  ]  10 

those  lots  is  not  shown,  nor  can  it  properly  be  included  in  the  amount  due 
the  canal  fund,  as  the  relief  law  passed  al  the  last  session  of  the  Legislature, 
as  construed  by  the  supreme  court,  measurably  wiped  that  debt  out  of  exist- 
ence. It  is  believed,  however,  if  this  amount  is  deducted  from  the  $520,- 
282  50,  enough  will  remain  to  redeem  nearly  two-thirds  of  the  indebtedness 
and  acceptances  yet  in  circulation.  There  being  no  other  means  for  its  ab- 
sorption, the  large  amount  it  became  necessary  to  pay  out  upon  work  pre- 
viously done,  a  portion  of  which  was  not  estimated  until  in  the  spring  and 
summer  of  1841,  and  the  scrip  outstanding,  caused  its  value  to  decline,  and 
consequently  gradually  lessened  the  amount  of  work  performed,  until  it  is 
now  almost  entirely  suspended.  If  the  canal  had  been  free  from  embarrass- 
ments, little  or  no  doubt  can  be  entertained  that  much  more  would  have 
been  accomplished. 

Should  it  be  determined  to  make  the  canal  property  hereafter  available  in 
the  construction  of  the  work,  the  necessity  will  exist  of  reducing  the  time  of 
payment  to  one,  two,  and  three  years.  We  are  clearly  satisfied  that  long 
credits  operate  injuriously  to  the  interests  of  the  State  and  purchaser,  and 
ought  not  to  be  allowed.  It  may  also  be  questioned  whether  the  Slate  de- 
rives any  advantage  from  the  restrictions  imposed  by  law  upon  the  lands 
lying  within  half  a  mile  of  the  canal ;  they  are  certainly  no  more  valuable 
for  agricultural  purposes  than  those  more  remote  from  the  line,  and  it  is  pre- 
sumed as  many  town  sites  have  been  selected  as  the  State  will  derive  profit 
from. 

Efforts  were  made  during  the  present  year  to  lease  water  power  at  Ottovva, 
that  mills  might  be  erected  against  the  Fox  river  feeder  could  be  finished 
and  ready  to  supply  them,  little  remaining  to  be  done  upon  it ;  but  these 
efforts  proved  fruitless,  owing,  it  is  believed,  to  the  oppressive  character  of 
the  law  regulating  the  disposition  of  this  power,  approved  February  22, 
1839.  This  law  provides  that  leases  shall  contain  a  reservation  of  the  right 
wholly  to  resume  the  water  conveyed,  and  the  privileges  thereby  granted  ; 
and  to  control  and  limit  the  use  of  such  water  and  privileges,  whenever,  in 
the  opinion  of  the  board,  or  Legislature,  the  necessary  supply  of  water  for 
the  use  of  the  canal,  or  the  safety  of  the  canal,  or  the  works  connected  there- 
with, shall  render  such  resumption,  control,  or  limitation  necessary  ;  and  a 
provision,  that  when  such  resumption  is  made,  or  control  or  limitation  im- 
posed, no  compensation  or  damage  shall  be  allowed  for  any  improvements 
or  erections  made  in  consequence  of  such  lease,  and  a  further  reservation 
shall  be  made  of  the  right  of  the  State,  without  any  compensation  to  the 
purchaser,  wholly  to  abandon  or  destroy  the  work  by  the  construction  of 
which  the  water  privileges  shall  have  been  created,  whenever,  in  the  opinion 
of  the  Legislature,  the  occupation  and  use  of  such  works  shall  cease  to  be 
advantageous  to  the  Slate.  We,  therefore,  respectfully  suggest,  whether  it 
would  not  be  proper  to  revise  the  law,  so  as  to  remove  these  objections. 
Unless  it  is  done,  few  individuals  will  be  found  hardy  enough  to  lease  the 
power. 

The  payment  of  attorneys'  fees  and  costs  upon  unsuccessful  suits,  com- 
menced by  the  land  agents,  has  been  a  serious  tax  upon  the  canal  fund,  and 
the  present  board  at  once  determined  that  the  State  was  not  liable  in  such 
cases,  and  that  it  was  the  duty  of  the  prosecuting  attorneys  to  attend  to  all 
business  in  their  respective  circuits  in  which  the  State  was  interested.  Some 
doubts,  however,  having  arisen  in  reference  to  these  questions,  the  commis- 
sioners have  made  an  agreed  case  with  the  sheriff  of  La  Salle  county,  whick 


f  H  [115] 

will  he  submitted  for  decision  at  the  present  term  of  the  supreme  court,  test- 
ing the  liability  of  the  State  to  pay  costs,  and  if  it  should  be  determined  she 
is  liable,  some  further  provision  of  law  may  become  necessary  in  the  prem- 
ises, as  well  as  an  act  to  extend  the  duty  of  prosecuting  attorneys,  requiring 
them  to  attend  to  all  causes  arising  out  of  the  canal,  or  any  of  its  property. 

It  will  be  remembered  General  Thornton  negotiated  a  loan  in  1840,  of 
$1,000,000  on  behalf  of  the  contractors,  with  Magniac,  Smith,  &  Co.,  of 
London,  and  at  the  last  session  of  the  Legislature  gave  a  detailed  account 
of  the  transaction,  and  showing  the  State  had  realized  $1,075,000  from  the 
bonds.  On  an  investigation  of  the  affairs  of  the  canal  we  discovered  a  de- 
ficiency, as  appeared  from  the  books  of  the  treasurer,  of  eighteen  thousand 
dollars,  and  caused  the  fact  to  be  communicated  to  him,  and  in  December 
last  he  visited  Lockport  and  made  such  exhibits  of  his  accounts  that  we 
were  then  satisfied  there  was  nothing  wrong.  He  had  been  authorized  by 
a  power  of  attorney  from  the  Governor,  to  purchase  scrip  with  a  portion  of 
the  proceeds  of  the  bonds,  which  he  had  done ;  and  a  letter  from  Nevins, 
Townsend  &  Co.,  of  New  York,  acknowledged  the  receipt  of  about  $47,000 
out  of  the  amount  for  interest  advanced  by  them  on  canal  bonds,  or  rather, 
loaned  to  General  Thornton  to  pay  it.  But  this  letter  not  being  such  a 
voucher  as  the  commissioners  could  receive,  the  whole  matter  was  left  open 
for  future  settlement  after  General  Thornton  should  proceed  to  New  York, 
and  obtain  the  proper  evidence  of  the  payment  of  the  money,  which  he 
promised  to  do,  and  return  to  Lockport.  This,  however,  he  did  not  do, 
and  the  whole  matter  rests  as  it  was.  The  high  character  General  Thorn- 
ton sustains,  forbids  the  idea  that  he  is  a  defaulter,  but  we  feel  it  our  duty 
to  communicate  the  facts  of  the  case. 

The  fund  commissioner  will  doubtless  furnish  a  statement  showing  the 
amount  of  interest  paid  upon  bonds  negotiated  for  canal  purposes,  as  a  law 
of  the  last  session  of  the  General  Assembly  made  it  his  duty  to  pay  it.  It 
may,  however,  be  remarked  that  no  bonds  have  been  disposed  of  for  this 
use  since  the  report  of  the  Commissioners  in  December,  1840,  except  the 
$197,000  mentioned  in  the  report  of  the  secretary  of  the  board. 

The  branches  of  the  State  bank,  in  a  few  instances  which  have  come  to 
our  knowledge,  have  re-issued  the  checks  mentioned  in  the  report  of  the 
secretary,  and  for  the  redemption  of  which  money  was  left  on  deposite  by 
the  commissioners.  Whether  this  was  done  with  the  knowledge  or  sanc- 
tion of  the  mother  bank  we  have  no  means  of  knowing.  The  act  is  cer- 
tainly reprehensible  in  the  highest  degree,  and  a  repetition  of  it  will  be  pre- 
vented if  possible.  Perhaps  the  interposition  of  some  legislative  provision 
would  be  the  most  effectual  check  to  such  unwarrantable  conduct. 

This  report  is  principally  confined  to  some  of  the  great  and  leading  ques- 
tions connected  with  the  canal,  but  if  there  is  any  information  desired,  not 
embraced  in  it,  or  those  of  the  different  officers  accompanying  it,  it  will 
gladly  be  furnished. 

In  conclusion,  we  refrain  from  presenting  any  plan  for  the  further  prose- 
cution  of  the  work.  This  question  is  one  of  so  much  magnitude  it  is  de- 
sirable all  the  friends  of  the  canal  should  agree  upon  a  bill  to  be  presented 
to  the  Legislature,  having  this  object  in  view,  and  we  earnestly  hope  this 
will  be  the  case.  It  can  not  well  be  otherwise  than  that  differences  of  opin- 
ion will  exist,  but  let  these  differences  be  harmonized  and  concessions  made^ 
if  necessary,  for  the  sake  of  an  enterprise  upon  the  success  of  which  de- 


[  115  ]  12 

pend  the  present  hopes  and  future  prosperity  of  the  State,  and  her  ultimate 
redemption  from  the  pecuniary  embarrassments  which  are  now  weighing 
her  down.  All  of  which  is  respectfully  submitted. 

I.  N.  MORRIS,  President. 
His  excellency  THOS.  FORD, 

Governor  of  the  State  of  Illinois. 


The  foregoing  report  of  the  president  of  the  board  was  submitted  to  me 
this  morning  for  my  inspection  and  approval.  I  regret,  extremely,  that  I 
am  under  the  necessity  of  differing  with  him  generally,  in  his  arguments 
and  conclusions,  as  set  forth  in  his  report.  I  regret  this  difference  of  opin- 
ion the  more  sincerely,  from  the  fact  of  the  great  importance  of  unity  of 
action  with  the  friends  of  the  canal,  and  more  particularly  with  those  to 
whom  its  supervision  is  intrusted.  It  is  only,  therefore,  from  laboring  un- 
der deep  conviction  that  a  portion  of  the  policy  as  pursued  on  the  canal, 
and  advocated  in  the  report,  has  been  wrong,  and  is  such  that  I  can  not 
subscribe  to.  The  great  anxiety  manifested  by  the  members  of  the  Legis- 
lature to  obtain  the  commissioners'  report,  with  the  accompanying  docu- 
ments, precludes  me,  at  this  late  day,  from  entering  into  a  detail  of  my  views 
on  the  subjects  of  difference,  or  from  making  such  a  report  as  I  should  de- 
sire ;  but  will  at  all  times  be  ready  to  give  any  information  within  my 
knowledge,  that  may  be  required. 

I  beg  leave  to  state,  that  I  have  carefully  examined  the  reports  of  the 
several  officers  herewith  submilted,  and  find  them  to  be  a  full  and  satisfac- 
tory exposition  01  their  respective  departments  ;  should  they  not  furnish  all 
the  information  desired,  I  shall  at  all  times  be  ready  to  give  such  further  in- 
formation on  the  subjects  as  may  be  in  my  power. 

Respectfully  submitted. 

JACOB  FRY, 
Acting  Commissioner  of  the  Illinois  and  Michigan  canal. 

SPRINGFIELD,  December  17,  1842. 


NOTE   BY  THE   PRESIDENT  OF  THE  BOARD. 

The  president  of  the  board  equally  regrets  that  any  difference  of  opinion 
should  exist  between  him  and  the  acting  commissioner,  but  duty  to  himself, 
and  to  what  he  conceives  to  be  the  best  interest  of  the  State,  forbids  him  to 
withhold  hts  recommendation  of  completing  the  canal  upon  the  raised  level 
plan  or  "shallow  cut." 

I.  N.  MORRIS,  President. 


13 

JANUARY  10,  1843. 


[115] 


Report  of  the  Committee  on  Finance,  to  whom  was  referred  the  resolution 
of  the  House,  relative  to  the  available  means  and  cur  rent  expenses  of  the 
State. 

Mr.  Arnold,  from  (he  Committee  on  Finance,  to  whom  was  referred  the 
following  resolution,  to  wit : 

"  Resolved,  That  the  Committee  on  Finance  be  requested  to  report  to  this 
House  a  statement  of  the  amount  of  the  present  indebtedness  of  the  State, 
together  with  a  statement  of  her  available  means,  her  present  and  prospec- 
tive resources,  the  probable  amount  per  annum  which  the  current  expenses 
of  the  State  will  require  for  the  next  five  years;  also,  the  probable  amount 
which  can  be  raised  under  the  present  revenue  system,  per  annum,  for  five 
years  to  come ;  the  expediency  or  inexpediency  of  reducing  the  present  rate 
of  taxation,  and  the  practicability  of  adopting  some  system  of  financial  pol- 
icy, which,  while  it  shall  not  impose  on  the  people  oppressive  taxation,  will 
ultimately  relieve  the  State  from  debt  ;" 

Have  had  the  same  under  consideration,  and  submit  the  following  report  : 

The  present  indebtedness  of  the  Stale,  exclusive  of  the  bonds  held  by, 
and  debts  due  to  the  State  Bank  and  Bank  of  Illinois,  is  as  follows : 

Canal  Debt. 

• 

Bonds  negotiated  on  account  of  canal  -  $3,742,188  00 

Interest  due  on  same,  January  1,  1S43  224.531  28 

Canal  scrip  bearing  interest  341,972 

Interest  due  on  same,  Jan.  1, 1843,  two  years,  nine  months  •          56,425  49 

Certificate  of  indebtedness  not  bearing  interest,  about  300,000  00 

Due  contractors,  per  centage  retained  120,WOO  00 

Total  canal  debt,  January  1, 1843  -                         -     4,785,1 17  48 
Bonds  issued  on  account  of  internal  improvement  system    -      5,085,444  00 

Scrip  issued  to  contractors    -  929,305,53 

Interest  due  on  above,  January  1,  1843  -                                   541,327  46 

Bonds  issued  for  statehouse  121,00 

Interest  probably  due  10,00000 

Due  school,  college  and  seminary  fund  808,084  48 

Interest  due  January,  1843  -          48,48504 

12,328,913  69 


Resources  of  the  State. 

Canal  lands  amounting  to  230,467  acres. 
Lots  in  Chicago,  unsold 
Lots  in  Lockport,  unsold      - 
Lots  in  Ottowa,  unsold 
Lots  in  La  Salle,  unsold 

These  lots  vary  in  value  from  $10  each  to  $5,000. 

Amount  due  canal  fund  for  lots  sold,  $207,682  53. 


-  370 

-  679 
.  914 

-  1,528 


[115]  14 

The  Illinois  and  Michigan  canal,  with  its  water  power,  stone  quarries^ 
coal  beds,  (fcc.,  forty  thousand  acres  of  land,  purchased  by  the  State,  and  se- 
lected along  the  lines  of  contemplated  railroads,  estimated  to  be  worth  from 
$5  to  $10  per  acre;  210,000  acres  of  valuable  lands,  selected  under  the  late 
distribution  bill  of  the  United  States;  ninety  thousand  five  hundred  and 
•evenly- seven  and  fifty-seventh  hundredths  acres  of  these  lands,  have  been 
estimated  by  the  commissioners  who  located  them,  to  be  worth  the  sum  of 
$357,199  18.  This  estimate  is  made  by  the  separate  valuation  of  each 
tract,  and  is,  therefore,  entitled  to  great  consideration.  The  aggregate  value 
can  not  be  greatly  less  than  one  million  of  dollars. 

The  value  of  the  canal  lands,  lots,  and  property,  depends  on  the  comple- 
tion of  that  great  work.  Without  going  into  detail  in  this  portion  of  the  re- 
port, we  now  hazard  the  statement  that  (he  canal  property  will,  on  the  com- 
pletion of  the  canal,  if  properly  husbanded  and  judiciously  sold,  extinguish 
the  entire  canal  debt. 

There  is,  also,  fifty-five  miles  of  railroad  from  Springfield  to  Meredosia,. 
which  is  rented  for  $10,000  per  annum. 

Railroad  iron,  value  unknown. 

Unsettled  claims  due  internal  improvement  fund,  amount  unknown. 
Three  per  cent,  fund  from  sale  of  lands,  due  30th  June  last        $37,206  39 
Our  share  of  proceeds  of  public  lands  to  July,  1842  51,909  35 

Recapitulation — Amount  of  debt  as  shown  above  $12,238,913  69. 

Canal  Resources. 

•  » 

Consisting  of  lands,  lots,  water  power,  &c.3  on  its  comple- 
tion, will  be  worth,  say  -    $6,500,000  00 
Amount  due  for  lands  and  lots  sold  207,682  53 
Forty  thousand  acres  of  land  belonging  to   internal  im- 
provement fund,  at  $7  50  per  acre  300,000  00 
Two  hundred  and  ten  thousand  acres,  worth           -             -      1,000,00000 


8,007,682  53 
Add  value  of  Meredoeia  railroad,  &c.  500,000  00 


8,507,682  53 

Also,  mill-sites,  rights  of  way,&c.,  of  very  considerable  value. 

Thus  it  is  seen  that  we  have  the  means  of  paying  more  than  two-thirds 
of  our  present  debt,  without  direct  taxation,  within  a  short  period,  if  it  could 
be  convened  into  money.  But  this  property  can  only  be  made  available  by 
exchanging  it  for  our  liabilities,  and  the  largest  item,  to  wit,  the  canal  re- 
•ources,  aie  of  comparatively  little  value  before  its  completion. 

It  will  be  observed,  that  the  amount  of  debt,  bearing  interest,  does  not 
Tary  far  from  eleven  millions  of  dollars,  the  annual  interest  on  which  is 
$ 660,000.  This  is  an  amount,  all  will  admit,  beyond  the  ability  of  the 
people,  at  present,  to  pay,  by  direct  taxation.  However  painful  such  a  con- 
clusion may  be  to  our  State  pride,  it  is  one  from  which  we  can  not  escape  ; 
our  credit  is  gone,  a  debt  of  fearful  magnitude  hangs  over  us,  and  a  question, 
of  most  intense  interest  now  arises — what  shall  be  the  future  policy  of  the 
State  with  regard  to  this  debt.  Your  committee  feel  pride  in  saying,  that  the 
voice  of  the  people,  through  their  executive,  through  the  legislature,  through 


15  [  115  ] 

every  organ  by  which  it  could  be  heard,  have  pronounced  the  noble  deter- 
mination, never  to  repudiate.  Such  is  the  honorable  attitude  which  this 
State  has  assumed  with  regard  to  the  public  debt.  We  have,  by  resolutions 
unanimously  adopted,  reiterated  the  pledge,  that  we  will  devote  all  our  avail- 
able resources,  beyond  an  economical  administration  of  the  government,  to 
the  reduction  and  ultimate  extinction  of  the  public  debt.  The  question  then 
returns  for  our  most  deliberate  consideration — what  shall  be  the  future  policy 
of  the  State ;  how  can  our  resouces  be  best  made  available  to  discharge  our 
debts.  s 

It  will  be  observed,  that  our  debt  is  divided  into  two  distinct  portions,  each 
of  which  was  incurred  for  a  particular  object,  and  for  the  payment  of  which, 
in  addition  to  the  plighted  faith  of  the  State,  there  are  distinct  securities:  the 
canal  debt,  and  the  internal  improvement  debt.  For  the  canal  debt,  there 
is  pledged  the  canal  lands,  tolls,  (fee.  The  value  of  these  securities  depend 
on  its  completion.  There  has  already  been  expended  on  the  work  between 
four  and  five  millions  of  dollars,  and  it  will  require  one  a  half  millions  more 
to  complete  it,  on  a  plan  of  the  high  level. 

It  is  supposed  that  within  a  short  period  after  its  completion,  say  one  or 
two  years,  that  the  lands,  town  lots,  water  power,  &c.,  may  be  sold  for  an 
amount  equal  to  its  entire  cost.  This  being  effected,  would  leave  its  entire 
revenues  to  be  devoted  to  the  payment  of  the  remaining  indebtedness  of  the 
State,  and  defraying  its  expenses.  It  is  supposed  that  the  amount  to  be  de- 
rived from  its  tolls  would  be  sufficient,  within  two  years  after  its  completion, 
to  pay  the  interest  on  the  present  State  debt,  after  reducing  that  debt  by  sale 
of  canal  property  and  internal  improvement  property,  as  will  be.  detailed 
hereafter.  Your  committee  have  thought  it  not  improper  to  examine  the 
truth  of  the  above  positions,  and  to  furnish  to  the  House  their  estimate  of  the 
yalue  of  canal  lands,  and  the  revenues  to  be  derived  from  that  source. 

1st,  What  will  the  canal  property  be  worth  on  its  completion  ?  It  has 
been  estimated  by  an  able  financier  of  New  York,  who  has  given  to  the 
subject  great  attention,  and  who  is  notoriously  cautious,  that  these  lands,  in- 
cluding town  sites,  will  be  worth,  on  an  average,  $30  per  acre.  This  esti- 
mate will  give  nearly  seven  millions  of  dollars.  This  estimate  is  not,  in  the 
opinion  of  your  committee,  extravagant.  These  lands,  donated  by  the 
United  States  to  Illinois,  for  the  purpose  of  aiding  in  the  construction  of  this 
work,  are  not  surpassed,  in  richness  and  fertility,  by  any  on  the  globe.  Sit- 
uated in  the  immediate  vicinity  of  this  work,  there  would  be  great  facilities 
for  market.  A  very  considerable  portion  of  them  are  covered  with  heavy 
timber,  which  alone  is  worth  the  above  estimate. 

We  would  call  the  attention  of  the  House  to  the  effects  which  other  ca- 
nals have  had  on  the  price  of  real  estate  lying  in  their  immediate  vicinity. 
The  western  portion  of  the  Erie  canal  ran  through  a  wild,  unsettled  coun- 
try, covered  with  a  heavy  forest ;  yet  the  lands  on  its  border,  although  they 
required  the  labor  of  a  lifetime  to  bring  a  small  farm  under  cultivation,  and 
were  neither  so  rich  nor  so  productive  as  ours,  rose,  in  a  few  years,  from  a 
nominal  value,  to  be  worth  from  twenty  to  thirty  dollars  per  acre,  and  are 
now  valued  at  from  forty  to  one  hundred  dollars  per  acre.  It  is  the  opinion 
of  many,  that  the  costs  of  transporting  the  agricultural  products  from  the 
line  of  the  Illinois  and  Michigan  canal  to  Buffalo,  would  be  more  than  bal- 
anced by  the  greater  productiveness  and  less  expensive  cultivation  of  ours ; 
and  on  the  completion  of  the  canal  our  lands  would  be  quite  as  valuable  as 
those  lying  on  the  Erie  canal. 


f  115] 

Inexhaustible  mines  of  coal  are  found  upon  them  ;  flourishing  villages 
have  already  sprung  upon  these  lands,  and  are  rapidly  increasing  and  en- 
hancing (heir  value.  The  business  of  the  canal  would  soon  convert  these 
villages  into  large  towns.  But  a  few  years  would  pass  before  Illinois  would 
have  her  Buffalo  and  her  Rochester.  Chicago,  Lockport,  Juliet,  Otlowa, 
and  La  Salle,  would,  at  no  distant  day,  rival  the  flourishing  towns  of  western. 
New  York,  and  the  same  impulse  of  prosperity  would  be  given  to  every  vil- 
lage, town,  arid  farm,  lying  on  the  Illinois  river,  to  its  termination.  Taking 
these  things  inlo  consideralion,  we  feel  warranted  in  saying  that  the  value  of 
the  canal  property,  on  the  completion  of  that  work,  will  equal  iis  entire  cost. 

2d,  What  amount  of  revenues  will  the  canal  yield?  It  requires  very  little 
consideration  to  perceive  that  ihere  is  no  olher  work  in  the  Union,  perhaps 
none  in  the  world,  which,  with  (he  same  number  of  miles  of  artificial  naviga- 
tion, opens  a  trade  between  territories  so  extensive, and  so  rich  in  agricultural 
and  mineral  products.  It  will  complete  the  water  communication  between 
the  east  and  west.  The  whole  territory  lying  on  the  great  lakes,  so  rapidly 
advancing  in  population  and  wealth,  with  the  whole  valley  of  the  Illinois, 
the  Mississippi  and  its  tributaries,  will  be  brought  into  commercial  intercourse. 
In  addition  to  the  immense  amount  of  agricultural  products  which  it  would 
carry  to  market,  there  would  be  large  items  of  lumber,  salt,  coal,  lead,  mer- 
chandise, and  manufactured  goods  from  the  east,  to  the  whole  valley  of  the 
upper  Mississippi,  and  the  groceries  of  the  south,  (fee. 

Experience  has  shown  that,  as  a  general  proposition,  the  northern  market, 
for  nearly  all  agricultural  producls,  is  the  best.  In  looking  to  ihe  probable 
revenue  from  the  Illinois  and  Michigan  canal,  we  see  that  a  belt  of  country, 
extending  from  Chicago  to  the  mouth  of  the  Illinois  river,  and  for  sixly  or 
eighty  miles  north  and  south  of  this  line,  would  do  its  business  on  this  canal. 
This  would  embrace  a  section  of  the  State  capable  of  producing  an  agricul- 
tural surplus,  as  large  as  that  produced  by  the  whole  State  of  New  York. 
All  this  section  of  country  would  be  supplied  with  merchandise  and  manu- 
factured goods  by  this  artery  of  trade.  In  the  single  articles  of  salt  and 
lumber,  we  think  it  susceptible  of  demonstration,  that  a  majority  of  the 
counties  so  situated  would  save  an  amount  annually,  more  than  sufficient  to 
pay  their  portion  of  the  interest  on  the  entire  public  debt.  Take  for  exam- 
ple the  county  of  Sangamon.  She  paid  to  the  State  revenue  in  1841  be- 
tween $10,000  and  $11,000.  She  consumes  ten  thousand  barrels  of  salt 
per  annum,  which,  at  three  dollars  per  barrel,  costs  her  $30,000.  One  the 
completion  of  the  canal,  she  could  save  on  it  at  least  one  dollar  on  a  barrel, 
and  at  the  same  time  obtain  a  very  superior  article. 

The  average  cost  in  Chicago,  say  $1  37  per  barrel  -    $1  37£ 

Transportation  from  Chicago  to  Meredosia  37£ 

Meredosia  to  Springfield  ....  25 


2  00 

Saving  on  ten  thousand  barrels,  $10,000.  An  equal  amount  could  be 
saved  on  lumber. 

Wheat  has  been  worth,  on  an  average,  thirty  cents  a  bushel  more  in 
Chicago  than  in  Springfield.  The  cost  of  transportation  could  not,  on 
completion  of  the  canal,  exceed  ten  cents  a  bushel,  leaving  a  net  gain  of 
twenty  cents  a  bushel.  This  would  amount3  in  a  surplus  of  one  hundred 
thousand  bushels,  to  $20,000.  These  estimates  can  be  readily  carried  out 
so  as  to  demonstrate,  that  every  county  within  seventy  miles  of  the  canal 


17  [115] 

or  Illinois  river,  would  make  a  net  gain  of  thousands  of  dollars  per  an- 
num, on  the  completion  of  this  work.  The  tolls  on  the  Erie  canal,  in  the 
year  1825,  the  first  year  after  its  completion,  amounted  to  $566,000 ;  in 
1826,  to  762,000.  In  1833,  after  a  reduction  of  twenty  per  cent.,  they 
had  increased  to  $1,542,695.  In  1826,  when  the  tolls  on  the  Erie  canal 
amounted  to  $762,000,  there  was  less  business  done  than  will  be  done  on 
ours  the  first  year  after  it  goes  into  operation.  Ohio,  Michigan,  Indiana, 
and  Illinois,  were  then  comparatively  a  wilderness,  and  their  rich  soil,  the 
products  of  which  have  swelled  the  income  of  the  Erie  canal  to  millions, 
was  useless  for  want  of  labor,  and  its  rank  vegetation  rotted  in  the  depths 
of  the  'forest,  and  on  the  face  of  the  broad  prairies.  Even  as  late  as  1836, 
when  the  aggregate  value  of  the  property  transported  on  the  Erie  canal, 
was  $67,000,000,  $50,000,000  belonged  to  the  citizens  of  the  State  of  New- 
York.  The  tolls  that  year  amounted  to  $1,614,342  06.  Why  should  not 
the  amount  of  property  on  the  Illinois  river,  and  Illinois  and  Michigan 
canal,  within  a  few  years  after  its  completion,  equal  that  belonging  to  citi- 
zens of  the  State  of  New  York  at  that  time  ?  Our  soil  is  far  more  produc- 
tive, is  cultivated  at  much  less  expense,  our  population  equally  industrious 
and  enterprising,  and  our  climate  more  desirable.  We  are  willing  then  to 
give  it  as  our  deliberate  opinion,  that  the  tolls  of  the  canal,  on  i:s  comple- 
tion, will,  within  a  short  period,  pay  the  interest  on  our  entire  public  debt, 
reduced,  as  it  will  be,  by  sale  of  canal  lands,  and  internal  improvements, 
and  other  property.  The  House  will  perceive  how  important  to  the  credit 
and  ability  of  the  State,  to  pay  her  debts,  is  the  completion  of  this  work. 

Again,  the  completion  of  this  work  will,  in  the  opinion  of  your  commit- 
tee, add  millions  to  the  taxable  property  of  the  State,  and  increase  her 
ability  to  pay  taxes,  and,  consequently,  lessen  the  rate  of  taxation.  The 
Erie  canal  was  completed  in  1825 — for  the  ten  years  next  preceding  its 
completion,  the  real  and  personal  property  of  the  State  had  decreased  from 
$281,255.123,  the  amount  assessed  in  1815,  to  $263,427.346,  amount  as- 
sessed in  1825  ;  showing  a  decrease,  in  ten  years,  of  $17,827,777.  The 
increase  for  the  ten  years  next  subsequent  to  its  completion,  was  from 
$263,427,346,  to  $528,576,379 ;  showing  an  increase  of  more  than  one 
hundred  per  cent,  in  ten  years.  The  proportionable  increase  in  Illinois 
would  be  still  more  rapid  in  consequence  of  the  influence  this  great  work 
would  have  upon  immigration.  The  aggregate  wealth  and  taxable  prop- 
erty would  be  most  rapidly  increased  by  the  introduction  of  men  and 
capital  from  abroad.  The  facilities  for  market,  created  by  the  canal,  would 
result  in  the  immediate  and  dense  settlement  of  the  entire  section  of  the 
State  bordering  on  the  canal  and  Illinois  river,  which  is  but  a  continua- 
tion of  the  canal,  and  its  rich  soil  would  be  brought  into  immediate  cul- 
tivation. The  value  of  the  products  of  this  entire  section  would  be  in- 
creased from  one-third  to  one-half,  by  opening  this  avenue  to  market. 
Immigration  would  flow  in,  real  estate  would  rise,  and  the  aggregate  value 
of  the  property  in  the  State  would  be  increased  to  an  extent  scarcely  to  be 
appreciated. 

Here  then  is  a  work  requiring  one  and  a  half  millions  of  dollars  to  com- 
plete, and  when  completed,  it  will,  first,  add  at  least  three  millions  to  the 
value  of  canal  property,  and  make  it  marketable.  Second,  it  will  yield  a 
revenue,  within  a  few  years,  equal  to  the  annual  interest  of  ten  millions 
of  public  debt.  Third,  it  will  add  from  fifty  to  one  hundred  millions  to 
the  aggregate  taxable  property  of  the  State. 
IB 


[115]  18 

Such  is  the  importance,  in  a  financial  view,  of  the  finishing  of  the  canal, 
as  one  of  the  resources  by  which  our  public  debt  is  to  be  paid. 

In  connexion  with  this  subject,  we  would  recommend  that  all  the  prop- 
erty belonging  to  the  internal  improvement  system,  the  forty  thousand 
acres  of  land,  and  the  Meredosia  railroad,  and  the  two  hundred  and  ten 
thousand  acres  lately  received  from  the  United  States,  be  valued  at  a  fair 
and  reasonable  valuation,  and  sold  for  bonds  and  scrip.  In  this  way  w? 
believe  ihe  debt  may  be,  honorably  and  honestly,  very  considerably  re- 
duced, and  the  burdens  of  the  people  relieved.  Your  committee  believe 
that  the  legislation  now  in  progress  will  relieve  the  State  from  the  bank 
bonds  and  debt.  If,  then,  we  can  liquidate  and  extinguish  the  bank  bonds, 
and  debt,  diminish  the  internal  improvement  debt  by  the  sale  of  property, 
provide  means  for  the  completion  of  the  canal,  and  thus  obtain  a  permanent 
source  of  large  revenue,  we  shall  relieve  the  State  from  her  embarrassments, 
and,  at  no  very  distant  period,  be  able  to  relieve  the  people  from  taxation 
to  pay  the  expenses  of  government.  But  it  is  for  the  interest  of  the  people 
to  strain  every  nerve,  to  make  almost  any  sacrifice  to  obtain  means  to  put 
the  canal  in  operation.  A  bill  has  been  submitted  to  the  House,  by  the 
appropriate  committee,  to  obtain  money  to  complete  this  work.  The  suc- 
cess of  that  project  depends  upon  ihe  State  doing  nothing  to  forfeit  or  shake 
confidence  abroad,  in  her  integrity  and  disposition  faithfully  to  fulfil  her 
obligations  to  the  full  extent  of  her  ability.  This  confidence  is  to  be  re- 
tained as  well  by  our  actions  as  by  declarations  and  resolutions.  This 
brings  us  to  consider  the  question,  whether  the  State  should  reduce  the  pres- 
ent rate  of  taxation.  This  is  a  question  of  great  difficulty,  and  to  which 
we  have  given  the  most  careful  examination.  We  understand  and  appre- 
ciale  the  difficulty  in  the  people's  paying  high  taxes  at  the  present  time  ; 
we  know  the  embarrassments  under  which  the  people  are  laboring,  from  the 
\vant  of  a  market  for  their  agricultural  products,  and  from  the  want  6f  a 
circulating  medium,  and,  while  we  are  in  favor  of  taxing  as  high  as  pos- 
sible, we  are  aware  that  there  is  a  point  beyond  which  taxation  can  not  go. 
If  the  present  rate  of  taxation  resnlts  in  the  depreciation  of  properly,  or  in 
causing  citizens  to  remove  trom  the  State,  or  in  deterring  others  from  com- 
ing into  it,  it  is  unquestionably  too  high,  and  should  be  reduced.  But  the 
present  rate  of  taxation  has  not,  Sv>  far  as  we  arc  advised,  produced  such 
results.  The  rate  is  not  as  high  as  in  many  of  our  sister  States. 

In  Indiana  the  Slate  tax  has  for  several  years  been  forty  cents  on  the 
hundred  dollars.  In  1S41  the  value  of  the  taxable  property  in  that  State 
was  one  hundred  million  of  dollars,  and  the  tax  raised  was  four  hundred 
thousand  dollars,  in  addition  to  which  there  was  a  poll  (ax  of  seventy-five 
cents. 

Ohio  pays  a  still  higher  tax.  The  amount  of  taxable  property  in  that 
State  in  1840  was  $112,037,861.  The  State  and  canal  tax,  &c.,  was 
$562,993  68.  This,  including  school,  bridge,  town,  and  all  other  taxes, 
amounting  in  that  year  to  the  enormous  sum  of  $1,770,161.  And  yet  there 
is  not,  and  has  not  been,  a  more  prosperous  State  in  the  Union. 

This  State  has  adopted  the  peculiar  provision  in  her  revenue  law,  that  if 
in  any  year  the  treasurer  perceives  that  the  amount  to  be  raised  by  the  tax  is 
not  sufficient  to  meet  the  accruing  interest  on  her  public  debt,  it  is  made  his 
duty  to  add  to  the  rate  an  amount  sufficient  to  do  so.  By  such  vigorous 
efforts,  this  noble  State  has,  amid  all  the  fluctuations  and  embarrassments 
of  the  times,  maintained  her  credit,  and  been  enabled  to  obtain  money  to 


19  [115] 

complete  her  public  works.  Under  all  her  burdens  of  taxation  she  has  out- 
stripped all  her  sister  States  in  their  progress  in  wealth  and  population.  High 
taxation  has  not  empoverished  but  enriched  her,  because  it  has  been  judi- 
ciously expended.  In  less  than  forty  years  her  population  has  increased 
from  50,000  to  1,500,000. 

The  present  rate  of  taxation  in  this  State  is  thirty  cents  on  the  hundred  dol- 
lar, ten  cents  of  which  is  set  apart  for  payment  of  interest  on  our  debts,  and 
can  not  be  used  fcr  any  other  purposes.  The  twenty  cents  on  the  hundred 
dollars  will  not,  in  the  opinion  of  your  committee,  very  much  more  than  de- 
fray the  ordinary  expenses  of  government,  and  pay  the  interest  on  the  school, 
college,  and  seminary  fund.  The  ordinary  expenses  of  the  government, 
even  for  the  last  few  years,  have  considerably  exceeded  the  receipts. 

The  following  is  a  statement,  by  the  Auditor,  of  the  ordinary  receipts  and 
disbursements  for  the  last  eight  years : 

Year.  Ordinary  receipts.  Ordinary  disbursements. 

1835  -         -       $70,100        *  $66,700 

1836  -         -         79,000        -  -        84,000 
1837—38          -       117,000                 -                 -       235,000 

1839  -  61,700        -        -        -         •       186,000 

1840  -        -       106,220        -  -       177,114 

1841  -        -       103,065        -        -  -       179,807 

1842  •       202,219        -  87,959 


739,304  1,016,281 

Deduct  $739,304 


Excess  of  expenditure  for  the  last  eight  years  276,977 

. 

This  statement  shows  the  importance  of  adopting  some  efficient  and  per- 
manent system  of  revenue  for  the  future.  The  auditor  estimates  the 
amount  of  auditor's  warrants  in  circulation  in  April  next,  will  be  $128,898  26> 
as  follows : 

Warrants  now  outstanding  $28,898  26 

Amount  necessary  for  the  expenses  of  the  Legislature         -  50,000  00 

To  pay  interest  on  school  fund,  salaries,  &c.  50,000  00 


128,898  26 

These  warrants  could  be  receivable  in  payment  of  taxes,  and  thus  facili- 
tate their  collection,  and  relieve  the  people  from  the  difficulty  of  procuring 
gold  and  silver. 

The  taxable  property  of  the  State,  by  the  assessments  of  1841,  is  $69,- 
831,419.  The  taxes  assessed  that  year  amounted  to  $210,445,  of  which 
only  $169,000  was  collected.  The  balance  went  to  defray  the  expenses 
of  collection,  or  allowed  as  credits  to  delinquent  tax-payers,  or  was  levied 
on  real  estate,  sold  or  bid  in  by  the  State  for  taxes. 

The  revenue  for  1842,  is  estimated  at  -       $240,000  00 

Expenditures  of  that  year,  estimated  by  the  Governor  at    -          137,492  00 

The  average  amount  of  annual  expenditure  will  not  exceed  (under  the 
spirit  of  economy  which  we  trust  will  hereafter  be  adopted),  for  five  yeara, 
$135,009  per  annum. 


[115] 

The  expense  of  collecting  the  revenue  may  be  greatly  diminished,  and 
the  burdens  of  the  people  may  be  greatly  lelieved,  by  cutting  down  the 
fees  of  officers  in  all  the  departments  of  the  government ;  to  effect  this 
object  the  committee  are  preparing  bills.  While  the  committee  are  un- 
willing to  do  anything  calculated  to  injure  the  credit  and  reputation  of  the 
State,  yet,  from  leviewing  the  whole  subject,  a  majority  of  the  committee 
have  come  to  the  conclusion  that,  from  causes  which  are  temporary  in  their 
character,  arising  from  the  derangement  of  the  currency,  the  absence  of  a 
circulating  medium,  and  the  want  of  a  market  for  their  agricultural  products, 
that  the  people  can  not,  without  great  sacrifice  and  inconvenience,  pay  the 
present  rate  of  taxation.  They,  therefore,  recommend  a  temporary  reduction, 
and  at  the  same  time  a  reduction  in  the  expenses  of  the  government. 

The  committee  hope  that  the  causes  which  compel  this  reduction  may 
be  of  short  duration,  and  that,  as  soon  as  practicable,  the  present  rate  shall 
be  adopted  and  continued  until  the  people  shall  be  relieved  from  the  bur- 
den by  the  revenue  of  the  canal,  and  by  the  disposition  of  the  property 
of  the  State  to  her  creditors.  By  this  course,  and  by  adopting  the  present 
rate  for  a  given  number  of  years,  we  shall  provide  for  the  current  expen- 
ses of  the  government,  and  have  a  constantly  increasing  surplus  to  be  applied 
to  the  reduction  and  eventual  extinction  of  the  debt.  The  reasons  why  it 
should  be  permanent  are  these — it  would  create  confidence  in  our  integrity ; 
it  would  encourage  immigration.  The  great  mass  of  immigrants  who  are  di- 
verted from  our  State,  are  operated  upon  by  two  reasons ;  the  fear  and  dis- 
grace and  evil  of  repudiation  on  the  one  hand,  and  on  the  other  hand  the 
fear  of  oppressive  taxation  ;  every  mechanic,  every  farmer,  every  capitalist, 
would  then  know  precisely  what  rate  of  taxation  he  would  have  to  pay,  and 
he  could  easily  compare  the  rate  of  taxation  in  this  and  other  States,  and 
this  rate  would  compare  favorably  with  that  of  several  other  States. 
-  The  amount  received  from  taxes  would  increase  very  rapidly,  by  the  in- 
crease of  taxable  property,  especially  after  the  completion  of  the  canal ;  the 
amount  of  taxable  lands  will  also  be  greatly  increased  during  the  next  five 
years.  The  following  statement  shows  the  number  of  acres  of  land  in  this 
State,  sold  by  the  United  States,  compiled  from  the  reports  of  commissioners 
of  the  General  Land  Office  : 

In  1836  -  -  -       3,199,708.64     acres. 

1837  -  -       1,012,489.10 

1838  -  -  -         778,560.32       « 

1839  -  -  -          752,158.99       " 
These  lands  will  become  taxable  five  years  after  their  days  of  sale,  respect- 
ively.    The  aggregate  amount  to  become  taxable  in  the  State,  according  to 
statement  of  auditor,  is  as  follows  : 

In  1843  .  -         14,271,000     acres. 

1844  -  -  -          15,000,000       " 

1845  -  .         16,132,876 

We  are  confident  that  the  adoption  of  the  system  recommended,  will  re- 
sult in  the  State  obtaining  money  on  the  security  proposed  to  complete  the 
Canal,  maintain  our  honor,  and  ultimately  relieve  the  State  from  debt;  it  will, 
without  oppressive  taxation,  extricate  us  from  overwhelming  difficulties,  pre- 
terve  our  name  untarnished,  complete  our  canal,  and  add  millions  to  the 
taxable  property  of  the  State.  Should  the  State,  by  a  general  and  perma- 
nent reduction  of  taxation,  induce  the  world  to  believe  that  she  never  intends 
to  pay,  our  canal  can  not  be  completed,  its  property  will  depreciate,  we  shall 


21  [  115  ] 

sink  deeper  and  deeper  into  debt,  interest  will  accumulate  upon  principal, 
until  the  load  becomes  beyond  the  ability  of  the  State  to  sustain,  and  actual 
or  passive  repudiation  is  inevitable  and  unavoidable. 

We  are  aware  that  it  requires  some  sacrifice,  much  patriotism,  and  a  stern 
regard  for  duty  and  their  obligations,  to  induce  the  people  to  adopt  and  pur- 
sue the  policy  recommended;  but  we  believe  they  are  willing  to  make  the 
sacrifice,  and  that  they  have  patriotism  and  a  love  of  justice  adequate  to  the 
occasion.  A  crisis  has  arrived  in  the  financial  history  of  Illinois  ;  we  have 
awakened  from  the  delusions  of  the  past;  our  future  destiny  depends  upon 
our  present  determination.  If  the  State  will  arouse  every  energy,  put  forth 
all  her  strength,  it  is  not  too  late  to  rescue  her  from  the  abyss  of  bankruptcy 
and  degradation  into  which  she  has  been  tending  ;  but  if  we  allow  our  energies 
to  be  paralyzed  by  despair  or  indifference,  we  are  lost  for  ever ;  we  shall  float 
down  the  current  until  our  case  is  desperate,  and  to  struggle  will  be  in  vain. 

We  have  as  a  State  almost  inexhaustible  resources,  rich  capabilities,  and 
it  needs  only  honesty,  wisdom,  and  economy,  to  save  us  from  the  dangers 
which  are  gathering  around  us ;  but  while  we  hesitate  or  do  nothing,  time 
flies,  and  interest  accumulates.  Let  the  State  make  a  permanent  reduction 
of  taxes,  and  it  is  vain  to  attempt  to  obtain  money  for  the  completion  of  the 
canal ;  all  confidence  in  your  resolutions  and  declarations  of  honesty  is  gone 
for  ever.  You  will  repudiate  practically  if  not  avowedly  ;  you  will  be  shun- 
ned by  all  honest  men  ;  your  best  citizens  will  seek  other  homes ;  public  and 
private  debt  will  accumulate,  and  overwhelming  ruin  and  disgrace  will  come 
upon  a  State  capable  of  being  the  first  in  the  Union.  Take  the  other  course 
and  all  will  be  well.  We  can  preserve  our  fame  untarnished,  regain  our  credit, 
and  at  no  distant  day  exhibit  the  most  sublime  illustration  the  world  ever  wit- 
nessed of  the  truth  of  the  old  maxim,  that  "honesty  is  the  best  policy." 


